Give mayors the power to get young people into work

Britain has been stuck in a low earnings, low productivity, and low growth cycle for 18 years. Someone who was born in 2008, the year of the financial crash, will become an adult this year, without ever having experienced the benefits of economic growth. Young people are now bearing the brunt of economic failure, as they struggle to find jobs with youth unemployment at 16%. Little wonder that this is rightly an issue that the Government has now turned its attention to with the Milburn Review.

A flatlining economy is starving young people of opportunities, but low growth is itself a product of failure to realise their potential. That’s why it’s so important to see growth and reform as two sides of the same coin, as many cities and mayors do. In Greater Manchester, this link between economic progress and public service reform has been understood for the last two decades. An early move for GM was to establish reform and prevention boards, pooling the public health grant across all local authorities, and establishing Work Well to keep more people at risk of ill health in work. Reducing poverty, ill health, and worklessness is as central to growth as urban densification, business innovation, and better connectivity. That’s why many MCAs have developed Local Growth Plans that combine both of these elements.

The Growth and Reform Network was set up to support mayors and councils on inclusive growth and public service reform. Developing the policies and practice that can drive this connection has never been more important. This should not be about abstract principles for reform, but instead needs to be laser focused on tackling the barriers that stand in the way of more rapid, inclusive growth. The crisis of economic inactivity and unemployment facing young people is perhaps the most pressing challenge we now face.

The last time youth unemployment was a major issue was after the 2008 financial crisis. The then Labour Government, worried about permanent economic scarring effects for young people, introduced the Future Jobs Fund - a major programme that created over 100,000 jobs for young people. The current government has borrowed from this with its Youth Jobs Guarantee.  But there are two important differences between the FJF and the Youth Jobs Guarantee. Firstly, the qualifying period for FJF was 6 months of unemployment, whereas the Youth Guarantee only applies after 18 months of unemployment. Secondly, the FJF was mobilised rapidly and its delivery was left to local leaders, a major triumph for Sir Steve Haughton (Leader of Barnsley Council, then and now), who helped persuade the Gordon Brown government to go down an unusually localist route, whereas the Youth Guarantee is much more of a national scheme.

Alan Milburn has likened the situation facing young people to being stuck on a downward escalator descending into long term unemployment, unfulfilled lives, and growing mental health problems.  We urgently need to reverse this, with rapid and co-ordinated action to support young people and to give them real opportunities, and a stake in their own economic future.

Mayors, Combined Authorities and Council Leaders are rightly calling for the powers and funding to get on with building a better future for their young people. They’ve also done a lot of thinking and practice development on what that could look like, from the Barnsley Pathways to Work commission, to South Yorkshire’s innovations on support for young people, to East Midlands Opportunity Escalator and the GM Prevention Demonstrator. The next step should be to devolve employment support responsibilities to mayors, to change the criteria for Youth Guarantee eligibility, so that it kicks in much earlier, and to enable MCAs and Councils to work with local businesses to deliver the jobs this could provide for young people.

Whilst this should be baked into the next phase of Integrated Settlements, we cannot afford to wait that long for action to support young people. The starting point should be large scale pilot programmes in some of our largest urban areas with the highest concentrations of economic inactivity and youth unemployment. In our recent report with the FGF,  Impactful Devolution 04, Strengthening the Foundations of Combined Authorities, we called for purposeful experimentation on employment support with the MCAs best able to deliver this.  As Government appears to have reached an impasse with its MPs on welfare reform, why not work with the mayors to deliver this? They should be given the powers and the programmes to invest now in tailored, locally led employment support, and job provision. And there should be experimentation over gainshare type financial arrangements for risk and incentivisation, where Mayors who achieve improved results for young people keep some of the savings to reinvest in prevention. This will both build a better future for young people, and at the same time cut the numbers in economic inactivity and the Welfare Bill.